What assumptions were made that might be revisited

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Reference no: EM133248096

Cosmetic Health: Good-Bite

Good-Bite has developed a new form of teeth-whitening strips. They dissolve in your mouth and leave less of a residue than current competitors. They're minty tasting so the experience is more pleasant, and test-customers reported greater perceived teeth-whit-ening than two competitors that were also tested.

Whitening strips seem to appeal to people 20-29 years old. Competitors' data on existing strips suggest they appeal to women slightly more than men, but for the moment, Good-Bite is not planning on differentiating on gender in the advertising. So, for now, let's ignore gender and just consider that 20- to 29-year-old age category.

The U.S. population is approximately 327 million souls, with 45.4 million in the target age bracket. About 7.5 million people have tried competitors' whitening strips (Good-Bite's aren't on the market yet), and roughly 3 million of them are semi-serious, frequent users.
Good-Bite is trying to guesstimate the size of its target market and its likely profitabil-ity. The Good-Bite product is sold in packages of 14 sets of strips (each set is an upper and lower pair) in each box. For customers using the whitening strips every day, the box would be a two-week supply.

Good-Bite isn't sure of the frequency a typical purchaser will buy yet, as the product category is still relatively new. However, they reason that an upper bound would be about 26 boxes bought by a consumer a year (52 weeks in the year, divided by the two-week supply that is sold in each box). A more conservative estimate would halve that (13 boxes; a little over one purchase each month. A far rore conservative estimate would be that a customer buys "a few" (two or three) boxes a year (let's say two to see how low the demand numbers go).Good-Bite expects to charge $50 per box

Read the Cosmetic Health: Good-Bite above and answer the following discussion questions.

Case Discussion Questions

Question 1. Should Good-Bite launch the whitening strips?

Question 2. What assumptions were made that might be revisited?

Reference no: EM133248096

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